What differences between a share sale and an asset sale should be considered when handing over a business in Georgia?

In a share sale, the company continues to exist with its assets and obligations, while its ownership changes. In an asset sale, the selected assets, contracts, and legal rights must be identified and transferred individually.

What areas should due diligence cover before selling a business in Georgia?

It should cover, in particular, ownership, finances, taxes, liabilities, security interests, contracts, employment, permits, litigation, and intellectual property rights. The findings provide the basis for the purchase price, warranties, and liability provisions.

What information should a business sale agreement in Georgia include?

The agreement should specify the subject of the sale, purchase price, payment method, transfer date, closing conditions, warranties, and liability limits. Transferred and excluded items should be listed in clear schedules.

What consents may be required for an asset sale in Georgia?

Contracts, permits, or other legal rights may depend on the consent of a contracting party or an authority. It is therefore necessary to check for each item whether an assignment, contract transfer, or new authorization is required.

Share or Asset Sale in a Business Handover

When selling a business in Georgia, it is important to distinguish between transferring company shares and selling individual assets. The chosen structure determines which contracts, liabilities, permits, and registry details are transferred, and which risks remain with the seller and buyer.

Tip

A share sale and an asset deal transfer different things economically and legally. In a share sale, the company generally continues to exist with its assets, contracts, and obligations; in an asset deal, selected items must be transferred individually. The structure therefore determines the scope of due diligence, required consents, allocation of liability, and work involved in closing.

авторҙар:Mariam&Luka

A business sale in Georgia begins with defining what is being sold. In a share sale, ownership of an interest in a company changes, while the business generally continues to exist with its assets, contracts, and obligations. In an asset deal, by contrast, selected assets and legal rights are transferred individually. These may include equipment, inventory, receivables, domains, intellectual property rights, customer relationships, and certain contracts. Due diligence should cover ownership, annual financial statements, tax positions, debts, security interests, ongoing contracts, employment relationships, permits, litigation, and intellectual property rights. When individual assets are sold, it is also necessary to establish for each item whether it is transferable, requires consent, or must be newly registered. Customer data and other personal data may be handed over only in compliance with applicable data protection requirements. The purchase agreement should clearly set out the subject of the sale, price, payment method, transfer date, conditions, warranties, liability limits, and the treatment of identified risks. Purchase price adjustments, holdbacks, or installment payments can be tied to verifiable financial data and clearly defined events. Schedules to the agreement should fully list the assets being transferred, liabilities being assumed, required consents, and excluded items. Depending on the structure, closing may require registry changes, handover records, assignments, contract transfers, and notifications to banks, business partners, employees, or authorities. Tax consequences should be assessed separately for the seller, the buyer, and, where applicable, the company. After closing, rights of disposal, account access, powers of attorney, invoicing, and operational responsibilities must align with the agreed transfer date.